U.S. Trade Tensions with China Not Yet Impacting Most Vendor Relationships, According to Financial Professionals Surveyed by Dun & Bradstreet
Even when looking at tariffs and trade tensions globally, respondents did not indicate that this was a top concern for finance departments. Just 13 percent cited international tariffs and trade agreements as the most influential event on their finance operations since 2016. Instead, the 2018 tax reform had the largest impact on corporate finance, as selected by one-third (33 percent) of respondents.
The tax plan was followed in respondent popularity by Federal interest rate hikes (22 percent), internal technology adoption such as RPA, ML and smart contracts (15 percent) and then international tariffs and trade agreements. Less-cited answers included market corrections (9 percent) and the FASB's new revenue recognition standard, or ASC 606 (8 percent).
Rate Hikes Won't Influence Cash Management for One-Third of Companies
Despite rate hikes taking second place on the list of corporate finance's most influential events since 2016, 37 percent of respondents do not expect to change their cash management practices if the Fed were to continue to raise rates up to three percent by 2021. Of those who would make changes, 34 percent would hold more cash on their balance sheets, 21 percent would decrease their credit utilization, 18 percent would seek fewer sources of credit, 18 percent would demand earlier payments from their buyers, 11 percent would adjust their target credit rating and just five percent would offer fewer sources of credit to their buyers.
"If inflation continues to rise as anticipated, businesses not considering the impact on cash reserves and credit availability could face a chain reaction impacting their ability to pay bills on time – and ultimately, this would impact their credit rating and access to further capital," said
Online Payments Top Blockchain in the Future of B2B Payments
With technology adoption having the third largest impact on corporate finance, respondents were asked about their predictions for the future of payments technology. Nearly half (44 percent) of professionals believe that B2B payments will be dominated by online payment platforms or e-checks by 2028; this is followed by 26 percent choosing the hotly-discussed blockchain technology and smart contracts. Credit cards fell behind these newer options, but 17 percent of those surveyed have faith that cards will continue to rein supreme in B2B payments a decade from now.
"We're likely about to see a significant surge in blockchain-enabled B2B payments, though implementation and ease of adoption remain challenging for businesses," said Dowdell. "Online payment methods are clearly more established, but their evolution in the B2B space – particularly as it relates to issues like cyber-security or payment terms – will be an interesting space to watch."
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